I'm in the county town, and you say I'm a big shot?

Chapter 614: If you bet right, you'll make a fortune; if you lose, you'll go bankrupt!

Felix was also very troubled.

The company suffered losses for four consecutive quarters, and its stock price continued to fall. Shareholders were already dissatisfied. However, the corn ethanol industry is now being gradually monopolized by multinational corporations. Small and medium-sized producers like them are struggling to keep up with the big companies due to issues such as cost and technology.

How can we present a beautiful year-end financial report without resorting to underhanded methods?
Why.
He also had his own problems; the sudden car accident meant he was about to face criminal charges. He certainly didn't want to go to jail.

To get a judge's ruling in your favor, you need to hire a good lawyer, collect enough evidence to support your case, and even resort to unconventional methods, all of which require a lot of money.

Fortunately, that stupid woman signed a settlement agreement, saving me a large sum of money in compensation.

What an eventful time.

Felix looked at the chilly autumn scenery outside and sighed deeply.

Fang Qingye returned to her villa in New York at around 6 p.m., when it was already dark. After dinner, she played with her daughter for a while, then went upstairs to her study, turned on her computer, and began analyzing the corn futures market.

After a decline in the third quarter, corn futures prices are now in a period of range-bound trading, hovering between $3.7 and $4.2 per bushel, as the market seeks a direction.

Fang Qingye looked at it, lost in thought.

Just then, my phone rang. I saw it was Ouyang Shaoqiang calling, so I picked it up. Ouyang Shaoqiang's Hong Kong-accented Mandarin immediately came through the receiver.

"Mr. Fang, after carefully analyzing Panshi Agriculture's financial statements and news about the company, and through our market monitoring system, our team has discovered a problem."

"you say?"

"Panshi Agriculture used a huge amount of funds to sell short positions on the main corn futures contract ZCM1503. The exact number is unknown, but based on the related investment amount in their third-quarter financial report, it should be no less than 5 lots."

According to CME corn futures trading rules, 1 lot = 5000 bushels. Today, the trading price of the CME corn main contract ZCM1503 is $3.8 per bushel. With a 10% margin, 5 lots would be approximately $0.95 billion.

This is an absolutely insane number for a company whose financial statements show annual revenue of only $13.2 billion!
"Mr. Fang, after combining publicly available data and cash flow analysis of corn processing companies in the Midwestern United States, we believe that PanShi Agriculture's financial resilience is insufficient to withstand significant price fluctuations. The decision-makers at PanShi Agriculture are not engaging in traditional futures hedging; they seem to be preparing to make a fortune in the futures market," Ouyang Shaoqiang further analyzed.

“You’re right. They’re aggressively shorting in the futures market, and they’re even reducing their stockpiling in the spot market.” Fang Qingye briefly told Ouyang Shaoqiang what she had seen and heard at the location of the Bogipsy Rock Agriculture Factory that day.

"This Felix is ​​incredibly daring. If he bets right, he'll make a fortune; if he loses, his company could go bankrupt!" Ouyang Shaoqiang exclaimed.

“Yes, of course I can’t let him have his way, so let’s start preparing to go long and build a position now!” Fang Qingye said with a smile.

“Chairman Fang, but there’s still one problem,” Ouyang Shaoqiang reminded him.

"Do you think the CME corn futures market is too large? That our funds can't influence the price?" Fang Qingye said.

"Yes, its trading volume is far higher than that of domestic corn futures. Moreover, there are four major grain traders and numerous investment institutions. Panshi Agriculture's small position is not a concern. However, if many institutions also short it, we simply cannot withstand it."

"What if we could find a way to create market expectations of rising spot corn prices?" Fang Qingye asked.

"That makes things much easier. If we want the expected price of US spot corn to rise, there are two factors based on the current analysis."

"First, the US corn planting area will decrease next year (2015), just like the cotton price surge during the period of reduced cotton planting area in the fall and winter of 2011 in China. This is based on the information released by the US Department of Agriculture. Mr. Fang, did you get this information in advance?"

"How could I possibly know any officials in the U.S. agricultural sector?" Fang Qingye laughed. "I'm not some investment banking tycoon like Goldman Sachs or UBS."

"The second factor is the projected increase in demand next year, both domestically and internationally, which will affect the trend of US corn futures." At this point, Ouyang Shaoqiang on the other end of the phone seemed to have thought of something and asked:

"Mr. Fang, last year when you went to Brazil to buy soybeans, I heard you dealt with officials from COFCO and COFCO Reserves?"

"Yes, all the soybeans the company purchased this year were ultimately shipped back to China by COFCO." "Then you must know COFCO officials well. Did you receive information that China will increase its corn imports next year?"

Ouyang Shaoqiang is right. In recent years, the country has mainly imported soybeans, and the import volume of corn is actually very small. Last year (2013), the import volume was only 230 million tons, mainly from the United States and Ukraine.

But compared to the more than 6000 million tons of soybeans imported, it is negligible.

Corn imports are expected to increase slowly over the next few years, with a surge only expected around 2020.

However, this trend alone is enough to make a big deal out of it!
Hearing Ouyang Shaoqiang ask this question, Fang Qingye answered with certainty, "Yes!"

"Great! We'll spread the news at the right time!" Ouyang Shaoqiang was very excited.

"Yes, listen to me then."

“Okay, Mr. Fang, how much capital is our branch office planning to invest this time? We currently have HKD 20.8 billion available.”

"About 10 billion, including the funds needed for the subsequent price surge."

"OK!"

After finishing the call, Fang Qingye immediately dialed the number of Shi Guangrong in Shanghai.

The call connected, but the sound was a bit noisy.

"Qingye, I'm at the factory in Wuyang. It's too noisy here. I'll find a quiet place for you to wait." A few minutes later, Shi Guangrong's voice was heard.

"Aoba, you're in New York? I heard you went there to set up an office for the company."

“Yes, Glory, you have to do something for me, as a favor.” Fang Qingye said directly.

"What's the matter, you say?"

"Hunting down a company called Rockstone Agriculture on the US futures market!"

"what?"

"I will send you information about this company to your email. They have sold a large number of short positions in ZCM1503 corn futures, while we are preparing to go long. Don't ask me why I am doing this yet."

“Okay! How much will I invest?” Shi Guangrong asked without hesitation.

"How much capital do you have available right now?" Fang Qingye asked in return.

"8 million to 10 billion."

"Let's go with 8 million then. We can start building the position step by step now."

"OK! I'll start as soon as I get back to Shanghai! Aoba, should we tell Rinko and the others to help you too?"

"Sure, you can tell them first, and I'll call them one by one."

"it is good!"

(End of this chapter)